I thought I’d heard every kind of low, sleazy corporate scheme for robbing workers, but then I opened my Saturday, March 22, 2008 Detroit Free Press and discovered a new angle on business banditry.
Can you believe the gall of General Motors and Chrysler? They’re planning to loot their workers’ pension funds to pay for buyouts to employees they want to leave.
Downsizing is a corporate advantage that ought to be paid for with shareholders’ money, not funds reserved for paying the pensions of retirees. But bookkeepers say the pension accounts are “overfunded,” meaning that today, stock market values are such that the funds’ investments could more than cover their pension obligations.
What we learn from an excellent piece of reporting by Free Press auto writer Tim Higgins is that this company gambit of digging into workers’ pockets is not really new. It’s been done before. The only difference today is that it’s happening with a union pension fund. Question is, will the United Auto Workers wake up and push back?
Do I have a pony in this race?
Darn tootin’ I do. It happens that I belong to Detroit Local 22 of The Newspaper Guild, which is part of the Communications Workers of America. For years until I retired with my buyout, I was a steward and a member of the local’s Executive Board. My buyout amounts to two weeks of full salary for every year I worked at the Free Press. Since I was there for 23 years, I’m getting 46 weeks of pay.
Deciding whether to take the “voluntary severance” wasn’t easy. I actually enjoyed my job at the Free Press. I wrote a personal column, met lots of neat people and had more freedom than most reporters. But the buyout was tempting. See, I have all these books I’ve written over the years, and I’m working on others. The chance to receive a paycheck for nearly a year — I call it the “Gannett Grant” — while devoting full time to writing and promoting my work was a temptation, and I decided to go for it.
But lurking in the back of my mind — and I’ll bet the other 15 or 16 staffers who took buyouts at the same time were thinking this way, too — was the notion that the Free Press would come around with a better buyout offer in a year or two. Why not? We all knew about the Flint Journal, where two weeks per year didn’t entice enough people, so the paper upped it to four weeks of salary for every year of service, with no cap. At the Free Press, the company limited the payout to one year of salary, no matter how many years of service the staffer had.
What does this have to do with GM and Chrysler and their slimy, thieving rob-the-pension buyout scheme?
Well, what if Gannett, which owns the Free Press, decided to lure more workers out of their jobs with a really sweet buyout offer, say as generous as the Flint Journal’s?
And what if Gannett, skinflints that they are, decided to do the deed at no cost to their corporate books? Maybe they read Tim Higgins’ Free Press story, too, and are thinking, Hey! The Free Press/Newspaper Guild pension is over-funded just like the ones at the automakers. Numbers change depending on the stock market and how pension fund investments are doing, but last I heard, the Free Press/Guild pension was over-funded by $13 million.
The Guild for years has pushed to increase the paltry monthly payouts for retirees, but the company has always refused. Right now, the payout — and this is no exaggeration — is not enough to support anything more than a poverty-level lifestyle.
Free Press owners — first Knight-Ridder and now Gannett — have always refused to raise the monthly pension allotment. Too risky, they said. What if stocks fall and the pension value declines? Don’t want to risk the whole thing by being generous. There was always the specter, though, that the owner might simply grab that over-funding pile of cash and walk out with it.
But what if Gannett threw caution to the wind upon seeing a golden opportunity to seduce more people out the door at no cost to the company? Finance the buyouts with the over-funded pension?
I wouldn’t be pleased. A few people taking buyouts would be digging into assets reserved for the entire cadre of Free Press retirees. More galling yet, some of those workers might not even be union members. That’s right, under the post-strike contract, Free Press editorial workers got an open shop. Membership is at 67 percent, but that means a third of staffers are freeloaders — moochers who reap the benefit of a union — better health insurance, minimum pay levels, grievance procedure, overtime/comp time, etc., INCLUDING A DEFINE BENEFIT PENSION — without paying union dues.
I would not be pleased if a few people were awarded a windfall out of a pension fund meant to cover the entire pool of present and future Free Press retirees.
Tim Higgins concluded his Free Press story with a quotation from onetime chairman of American Motors Gerald Meyers, now a University of Michigan business prof who termed the automakers’ pension grab “a redistribution of wealth to a limited number of people.”
“A pension fund,” Meyers said, “Is set up to cover the needs of the greater good, not just the few people leaving the company.”
Now, this hasn’t happened yet at the Free Press. But supposed it did — how could we stop it?
We could rely on our union to stand firm. The Free Press/Guild pension is overseen by a board with two company members and two Guild members. But as we know, in this world, everything is for sale, everything is up for grabs, and every three years the Guild and Free Press negotiate a new contract. No reason this kind of freebie buyout couldn’t be placed on the table to become chip for some other issue like, say, health insurance.
I doubt that would happen. The Guild has always been very protective of its retirees. Hey, every working employee knows he or she will be retired some day, and they want to make sure those benefits are there for them and for everybody. In fact, I can imagine certain Guild leaders reacting with fury at today’s Free Press story about GM and Chrysler’s shenanigans.
Still, what if something happened that we can’t imagine. What if Gannett managers, not exactly geniuses at figuring out this Internet thing that is so vexing newspapers, so bungled its management of the biggest newspaper chain in the country that they were forced to consider closing the Free Press unless they could radically reduce staffing. Then maybe that pile of pension cash might seem very tempting.
In other words, as the saying goes, you never know.
Those of us receiving pensions would have to fight the battle ourselves. No reason why we couldn’t hire a good lawyer and try to stop the plunder.
I wonder if any other unions with defined benefit pensions are worried about this kind of corporate raiding?
I’m hoping the UAW will fight this attempted theft. If they quashed it, chances are slim that companies like Gannett would try it.
But if not, we will be alone in the world against a corporate giant. Unless, well, unless we organize!
Retirees of the world, unite! You have nothing to lose but your pensions.
